Marsh Files Chapter 11

Company Files for Chapter 11 Protection to Preserve Value of Enterprise during Sale Process

INDIANAPOLIS, May 11, 2017 /PRNewswire/ — Marsh Supermarkets, LLC, today announced that it has filed for protection under Chapter 11 of the U.S. Bankruptcy Code in the District of Delaware, a step the Company has taken to enable its business operations to continue normally as it seeks a buyer for all or part of the 86-year-old grocery store chain.

All of the Company’s 44 locations will continue normal operations throughout this process.

“While today’s decision was extremely difficult, we believe this action is necessary to preserve the value of the business as we seek a sale,” said Chief Executive Officer Tom O’Boyle. “After reviewing every alternative, we concluded that Chapter 11 clearly provides the most effective and efficient means to ensure the best recovery for the Company’s stakeholders.”

The Company has retained Peter J. Solomon Company as investment bank to market its assets.

The Chapter 11 filing permits daily operations to continue without interruption. The stores will remain open and serving customers, employees will continue to receive their usual salary and benefits, and goods and services purchased by the Company, after the May 11, 2017 filing date, will be paid for in the ordinary course of business.

As is customary, the filing triggers an automatic stay, which precludes the Company from paying amounts owed for pre-petition goods and services without a Court order.

The Company has asked the Bankruptcy Court’s permission to use its available cash to fund operations during this period, since the Company’s Secured Lenders have already agreed to allow the Company to do so. The Company expects to have sufficient liquidity to fund operations throughout the sale process.

Besides use of its cash, the Company also has sought approval to pay its employees and provide benefits as normal, to continue customer programs as normal, and to continue the closing store sales at select locations.

Marsh Supermarkets was founded in Muncie, Indiana, in 1931 by Ermal Marsh. Throughout its history, Marsh has been a leader in technology, becoming the nation’s first grocery chain to ring up purchases with electronic scanners and the first to adopt a system that wirelessly delivers coupons to customers’ smart phones as they shop. As a company that has long been a landmark in its region, Marsh is hoping to find the right buyer so that we can continue to serve families across Indiana and Ohio.

In recent years, the Company has struggled to compete effectively against larger national and regional chains that have made the Indiana and Ohiogrocery marketplace among the nation’s most competitive.

The crowded environment has led to price-cutting and other forms of promotional activity that have put profit margins under extreme pressure. Marsh has reacted this year by closing 21 unprofitable stores and, in late April, the sale of its in-store pharmacy business to Hook-SupeRx, L.L.C., a subsidiary of CVS Pharmacy. The result is a chain of 44 stores that Marsh believes can be a valuable acquisition or merger partner for a grocery company or other buyer.

Marsh is represented by Robert S. Brady and Michael R. Nestor of the law firm Young Conaway Stargatt & Taylor, LLP. Lee Diercks, Partner of the Clear Thinking Group LLC, is acting as Chief Restructuring Officer and Clear Thinking Group LLC is acting as the Company’s Financial Advisor.